Wall Street high rollers are expecting big bonuses at year-end—especially hedge fund managers and executives at boutique banks.
Sixty-two percent of the 1,098 Wall Street executives that eFinancialCareers.com surveyed expect the same—or higher—bonuses this year. This is down from last year, however, when 71% anticipated that their annual bonus would increase or remain level.
The falloff is principally due to less optimism among large bank employees, eFinancialCareers.com said.
Conversely, nearly one-third, 30%, of Wall Street executives are bracing for lower bonuses, up considerably from 20% last year. They pointed to firm performance and market conditions as the main reasons their payouts are likely to decline.
Fifty-two percent blamed Dodd-Frank’s weighting of compensation toward base salary rather than bonuses for resulting in smaller paydays and layoffs on Wall Street.
Dodd-Frank, too, might be the reason why 46% predict bonuses will decline in the next three years. Only 20% expect bonuses will get a bump up between now and 2014, indicating quite a bit more pessimism from the 34% who were expecting compensation to decline last year.
“Even amid an atmosphere of slower recruitment activity and targeted layoffs, Wall Street will continue to be a pay-for-performance culture,” said Constance Melrose, managing director of eFinancialCareers North America. “Firms need to be resolute in taking care of their best-in-class employees, as they will always have opportunities to make a career move if they feel disenchanted.”
Surprisingly, however, a majority of the executives surveyed, 59%, said money is not the No. 1 reason why they work on Wall Street, consistent with the 61% who testified to this last year. The online financial services job posting service did not ask the executives what motivates them the most to work in the industry.
